Argentina has been fighting with Singer, and other bondholders
that bought its sovereign debt maturing in 2017, for about a
decade. Singer and co. ( known as exchange bondholders) refused
to restructure the debt that they held on two occasions, in 2005
and 2010.

Argentina, in response, refused to pay its debt to exchange
bondholders, instead favoring bondholders that restructured.

Now the case is coming to a head. So far, there has a been a stay
placed on Argentine payments to exchange bondholders during Court
proceedings. Last week, though, New York Judge Thomas Griese
ruled that Argentina would have to pay the plaintiffs next month.
If that holds true, the country will have to pay out $3 billion
to exchange bondholders alone.

This could be what a 2012 Argentine credit event looks like. And
this is where the Credit Derivatives Determinations Committee
comes in. Here's what they do:

The ISDA Credit Derivatives Determinations Committees (“DCs”)
were established on April 8, 2009. The DCs make
determinations that apply to credit derivative transactions on
subjects including Credit Events, CDS Auctions, Successor
Reference Entities and other issues. The determinations
made by the DC are governed by the Determinations Committees
Rules. ISDA acts as a non-voting secretary to each DC and
endeavors to co-ordinate this process in a transparent and
operationally efficient manner.

Elliott Capital is known as a "non-dealer voting member" of this
committee. According to the DCs bylaws, it was chosen for this
position at random from a list of eligible non-dealers
"designated as not having been previously identified to
serve on a Committee and designated as a "private investment
company manager" or "registered investment company manager"..."
on the appointed list review date.

Now before we start up with the conspiracy theories. Let's
take a look at the process the committee uses to determine
whether or not a nation is in default.

In the Americas, there are 17 voting members on the board.
A supermajority of them must all agree that a country is in
default for the decision to be made.

The DC has a fascinating paper about how that works. Here's
a telling excerpt:

Of the more than 900 DC questions considered to
date, approximately 96% have been decided unanimously.
This is because the vast majority of determinations made by the
DCs are determined by straightforward application of publicly
available facts to the relevant provisions of the Credit
Derivatives Definitions. The following statistics are as of March
7, 2012:

For the last ten Credit Events, the average DC deliberation time
between the date the DC was asked whether a Credit Event had
occurred and the date on which a Credit Event was announced was
one day in the Americas and three days in Europe. For the last
five Credit Events in Asia & Oceana, the average time was
five days.

If the DC can't come to an agreement, the decision goes
through an External Review process involving third party market
professionals and legal experts. Throughout this process, members
are bound by confidentiality agreements and are unable to trade
on any information they are privy to from being on the
board.

So even if Singer voted for Argentine default, that
wouldn't mean that he would get his way if that data weren't
there.

More than that, experts who have gone head to head with
Singer (legally speaking) believe he would recuse himself in the
event of a conflict of interest. Take William A. Brandt, Jr., for
instance.

Brandt is the President of Development Specialists Inc. and
is considered one of the country's premier bankruptcy and
restructuring experts. He's also the Chairman of the Illinois
Finance Authority, the largest state bond issuer in the United
States. Despite his own experience being on the other side of
Singer's wrath, he says no one should believe that he will use
his status on the DC to call for an Argentine credit
event.

"I would divorce the decision to put a country in default
from his own position," said Brandt. "There are bright line tests
that countries must pass for that decision to be made."

If a country passes those tests, credit default swaps are
triggered, and we know what kind of chaos follows.